We usually think about taking a payday loan when the bank rejects our application or when we need money for it. Can payday pay really be cheaper than a bank loan?
Although some banks declare that they will lend money as evidence, the person concerned must provide the name of the workplace and the number of earnings. In practice, those who have no income or appear on one of the debtors’ bases have no chance to borrow even a small amount. They also remain only non-bank companies offering so-called payday loans or short-term loans.
When it comes to non-bank loans, specialists emphasize that it is relatively expensive to take one. Is it really It depends on which loan you are talking about.
Guaranteed payday loans: Easy money for you
To apply for a guaranteed payday loan, all you have to do is register on Purple site and then apply for a loan of the chosen amount.
The cost of taking out payday loans should be checked primarily by people intending to take out such a loan for the second time. What if you have never needed extra money before and thus have not used the offer of non-bank companies? To interest consumers and make them apply for funds, such companies propose the first loan for $ 0. This means that when you receive, e.g. $ 1,000, you will be required to pay exactly the same amount.
Note that when borrowing from a bank – regardless of whether you are talking about the first or subsequent loan – you will always incur costs. Taking advantage of the fact that individual non-bank companies compete not only with each other but also with other financial entities operating on the market, including banks, you can only gain – borrow money for a short period at no cost.
The above solution pays off only if you are sure that you will be able to give money back, e.g. within 14 or 30 days. It is true that you can always use the option to postpone the repayment date, but this option is a payment – by postponing the payment date by 30 days, you can pay up to about $ 800!
How much does the loan cost for a while?
What does the cost of a non-bank loan consist of? Most often we talk about:
- Interest – although it is worth paying attention to, they are not the most important. If you are going to borrow money for a short period, e.g. 7, 14 or 30 days, it will not be so noticeable when paying off the liability.
- Commissions – just like in the case of interest, you will be obliged to pay such fees – companies offering both loans without a BIK or for a short period always charge a commission. The higher the amount you want to borrow, the higher the lender will charge. When comparing offers, you should pay special attention to this issue.
How to quickly compare the cost of a non-bank loan? You can use a special comparison engine, you can also look at the APRC, i.e. the Real Annual Interest Rate. Both banks and non-bank companies are required to inform about the APRC of their products.
When you borrowed once for free, you can …
… borrow for free once again. How it’s possible? You should pay attention to the cost of a non-bank loan when you borrow money from the same company again. Most non-bank companies rightly assume that the client who has applied received and repaid the loan within the deadline will return the next time he needs additional money. However, what if – instead of being a loyal customer – you decide to take advantage of the competition offer?
Taking a payday loan in a competitive company, you can once again borrow without costs, if of course, you are a new customer. You have to be careful only one thing – some non-bank companies create many brands. In practice, therefore, you may find that you cannot take advantage of the free loan offer, as you are already in the company’s customer base.
Cheaper than in the bank
If you need additional funds literally for a few days, then you will do better by borrowing in a non-bank company than in a bank, because the former can grant you a loan free of charge. In fact, although non-bank loans are expensive, in some cases they may be cheaper than financial products offered by the bank. You should remember this – in this way you can save a lot.
Before taking out a loan without BIK or one where a non-bank company verifies your previous credit history, remember to make sure that you will be able to pay it back within the declared period. Otherwise, you have to take into account considerable costs – the non-banking company will have the right to charge you the cost of reminding you about the repayment deadline. The cost of prompts depends on the company – some charge a few, others a dozen USD. Only when you pay off your first loan on time will it be cheaper than a loan you would get from a bank – you must remember that.